The Official NBS Manufacturing PMI data in China is going to provide early indications of the country’s anticipated economic recovery after the coronavirus outbreak at the beginning of the year.
China started to slowly remove its government-imposed restrictions on movement and travel over the past several weeks, as the COVID-19 outbreak in the country appears to have moved past its peak.
As Chinese people are now being allowed to start returning to their workplaces gradually, economists expect to see early evidence pointing towards the gradual stabilisation of the economic activity in China.
Manufacturing in China, which is considered to be the world’s workshop, is of crucial importance as a gauge of the overall economy’s wellbeing.
Thereby, it is hoped that the findings of Monday’s report are going to give investors and policymakers reasons to remain optimistic concerning China’s quick economic recovery from the COVID-19 fallout.
The NBS Manufacturing PMI fell to the record-breaking low at 35.7 index points in February, which was way below the market expectations. This time the consensus forecasts project a moderate recovery to 44.9 points in March.
China Manufacturing PMI. Image source: TradingEconomics.com
Such results would be below the index average, but they would also represent an initial sign of stabilisation, which could stimulate a bullish correction in the Chinese stock market.
The Shanghai Composite Index recently fell to the significant support level at 2685.25, which formed a dip during the initial market selloff that was prompted in the early days of the coronavirus epidemic in the country.
Subsequently, the index managed to wipe out some of these losses over the last several days. Its price is currently consolidating just below the 23.6 per cent Fibonacci retracement level at 2789.462, which is serving as a crucial resistance level.
SHCOMP 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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